Disqualification of Directors

A liquidator or an administrator has a duty to file a return with the Insolvency Service for each person that has acted as a director of a company in the three years before the company was placed into liquidation/administration.  The Insolvency Service will then decide whether there is sufficient evidence of wrongdoing or reckless behaviour to warrant a disqualification. Examples of this type of behaviour might include:  

  • Trading whilst insolvent so that a company continues to trade when the directors should have known that it could not meet its liabilities as and when they fall due.
  • Not maintaining proper accounting records so that the directors are able to establish the true trading position of the company at any time. 
  • Failing to file accounts at Companies House
  • Using tax (PAYE, VAT, corporation tax and others) to fund the company by failing to pay the tax over to HM Revenue and Customs.  
  • Misappropriating the company’s money for personal use. 
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